Best Practices

//In this new series, Intralinks has partnered with Yoav M. Cohen, Managing Partner and CEO of NYC Advisors, LLC, to learn more about how to best execute turnarounds. In this third and final installment, Yoav discusses some success stories based on following the turnaround techniques discussed the previous two installements.

These achievements were a result of a roadmap that was developed by the telecommunications company’s management — incorporating the steps discussed in the action plan. Specifically, this company concentrated on the first two steps of the plan. This allowed them to control cash and cut unnecessary costs as well as restructure the Board of Directors, bring in new senior management and enjoy the full cooperation of all employees. The company also had to look externally; specifically, working with their suppliers to reduce costs was key. Throughout the entire process, the company’s banks were all involved which helped the bankers get comfortable enough with the results of the turnaround that they offered the company an acquisition line of credit, enabling them to buy three companies and continue on the path to success.

A publicly held, global pharmaceutical company successfully turned around from a first quarter loss of $235K to a year-end pre-tax profit of $790K, and next year first quarter pre-tax profit of $1.1M by

Re-engineering all internal controls and establishing infrastructure for new financial reporting

Implementing new financial and ERP systems in Israel and Canada

Working with auditors to establish tax planning programs for the future while reducing taxes by $700K

Working with bankers to re-structure their line of credit

Replacing key personnel with new professionals

Here, again, the roadmap assisted by allowing them to hone in on the issues at hand. Reaching out to external parties — in this case, auditors — was particularly helpful because they were able to help with formulating and implementing a new global tax strategy, enhancing internal controls, and choosing a new ERP system.

There is rarely a situation that is insurmountable. Being able to recognize that a problem exists, then decisively dealing with it is key. More importantly, it’s OK to ask for help. If your skills are not suitable for this task, then call in an expert who can help you lead the turnaround, or help sell your company at the best price possible given its distressed situation.

About the Author

Yoav Cohen is the Managing Partner of NYC Advisors, LLC and has 25 years experience providing financial and operating leadership to companies ranging from startups to Fortune 500 companies. He is an expert in mergers & acquisitions, complex negotiations, strategic planning, international finance, restructuring, business development and team building.